Dec. 24 (Bloomberg) -- Goldman Sachs Group Inc., weighing
2010 pay packages for a year that could rank as Wall Street’s
second best, said it may grant bonuses that depend on future
earnings, in addition to stock performance.

The awards would go to “key employees” and be tied to a
variety of financial measures including revenue, net income and
return on equity, a gauge of profitability, the New York-based
company said yesterday in a regulatory filing. Awards may
consist of cash, securities or other equity-linked components,
and carry provisions allowing their cancellation or return.

The plan “is a tool the compensation committee may use to
further align incentive compensation with long-term
performance,” said Stephen Cohen, a company spokesman. Cohen
declined to provide figures on potential payouts, saying that
awards haven’t been set.

Regulators have pushed banks to design pay packages for top
employees that would discourage excessive risk-taking, after a
financial crisis wiped out firms including Lehman Brothers
Holdings Inc. and led to government bailouts. Most firms have
interpreted the guidance to emphasize deferred stock awards over
cash bonuses.

Goldman Sachs’s new program aims to ensure “that the
firm’s incentive-compensation structure is balanced and
consistent with the safety and soundness of the firm,”
according to the filing. It won’t fuel “imprudent risk-taking,” it said.

Recipients will be selected by the board’s compensation
committee, according to the filing, which didn’t specify
eligible executives.

“Improper Risk”

The payouts may be halted or reclaimed if the firm
determines, for example, that an employee engaged in
“materially improper risk analysis or failed sufficiently to
raise concerns about risks,” according to the filing. Previous
awards have also included so-called recapture provisions.

The new plan, adopted by the compensation committee Dec.
17, was disclosed after the close of New York markets yesterday,
the last trading session before Christmas.

Goldman Sachs and the four other largest U.S. firms by
investment-banking and trading revenue -- JPMorgan Chase & Co.,
Bank of America Corp., Citigroup Inc. and Morgan Stanley -- are
set to complete their best two years in investment banking and
trading. They will likely have a better fourth quarter than the
previous two periods, driven by equity underwriting and higher
volume in stock and bond trading, according to data compiled by
Bloomberg. Even if the quarter only matches the third, their
revenue will top that of any year except 2009.